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August 2017

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India has moved up from 54th place in 2014 to 35th in 2016 in the World Bank's biennial measure of international supply chain efficiency, called Logistics Performance Index.

Germany emerged as the top performer for the second time in a row, while India was ahead of Portugal and New Zealand. In 2016, India's international supply chain efficiency was at 75 per cent of top-ranked Germany, said the report titled Connecting to Compete: 2016 Trade Logistics in the Global Economy. This is an improvement over the 66 per cent efficiency when compared to Germany which was also the leader in 2014.

Better performance in logistics will not only boost programmes, such as Make in India, by enabling India to become part of the global supply chain, it can also help increase trade. In 2015-16, India's foreign trade shrank by around 15 per cent.

The index scores countries on key criteria of logistics performance, including border clearance efficiency, infrastructure quality, ability to track and trace consignments, and timeliness of shipments, among others.

It is computed from the survey responses of about 1,051 logistics industry professionals.

The Logistics Performance Index does not address how easy or difficult it is to move goods to the hinterland. For that, World Bank has another measure - a domestic LPI which analyzes a country's performance over four factors: infrastructure, services, border procedures and supply chain reliability.

While not all yardsticks are comparable across countries, there are some which show that India still has some way to go.

When it comes to meeting the quality criteria, only 69 per cent of shipments from India make the cut, compared to 72 per cent for China and 77 per cent for Kenya. On the other hand, it takes two and three days to clear shipments, without and with inspection, respectively—numbers comparable to China but longer than what it takes in top-ranked Germany.

India has an average of 5 forms required for import or export, compared to 4.5 for China and 2 for Germany. (SH)